In Defense Of Venture Capitalists

Posted by: Mark Solon

I came across a blog post by Ben Horowitz this morning, a tremendously successful silicon valley entrepreneur who very recently became a venture capitalist, partnering with another highly successful entrepreneur, Mark Andreessen to form Andreessen Horowitz. Now by all accounts, Ben’s a terrific guy who is passionate about building great businesses and I think it’s fantastic that guys like Mark and Ben have chosen to use their vast experience to help a whole new generation of entrepreneurs build their companies.

However, as I read through Ben’s post, it pissed me off. I read it twice and I grew ticked off that Ben chose to rant about things that VCs do that he doesn’t like. I chalked it up to the fact that Ben probably had a bad experience with a colleague yesterday and decided to vent a little bit. It bothered me that a prominent guy like Ben, after only nine months as a VC, took time on his bully pulpit to rant about the behavior of his colleagues.

From my perspective, he was self-aggrandizing and somewhat cowardly. While he started his message with a disclaimer sentence about the “great” VCs he’s worked with, he spent the rest of the time unloading on the unwashed group of VCs who in his words are “fake, confused and psuedo-tough.” I wish I had a dollar for every new VC who came into the business preaching about how he didn’t like the behavior of his fellow VCs and that he was going to be “different.” Ben even goes so far as finishing with advice to VCs on how they can improve their behavior.

Like I said earlier, by all accounts Ben’s a high-character guy and like most of us perhaps took his new blog platform as a method to get a little preachy. Fact is, I’ve been investing in startups for fifteen years now and I’ve worked with many dozens if not hundreds of VCs along the way and in all that time, I’ve only worked with a handful who exhibit the type of behavior that Ben describes. The overwhelming majority of VCs I’ve worked with get up in the morning and think about how they’re going to help their portfolio companies that day. They build close and often times personal relationships with the management teams that they work with and their input is both welcomed and appreciated by the entrepreneurs who they work with.

Ben’s message could have been about any professional. There are entrepreneurs, lawyers, doctors and people from all walks of life who don’t prosecute their jobs as well as they could. In most professions however, those people represent a very small percentage, just like the venture capital profession. Calling out VCs because they wanted to have a cup of coffee with you without an agenda? C’mon pal, I understand that we’re all busy but is that really necessary?

Remember Herb Brooks’ famous line in the dressing room when he was talking to Team USA before they went out and played the Russians? “I’m sick and tired of hearin’ about what a great hockey team the Soviets have”! Well I’m sick and tired about hearing about how lousy my friends and colleagues are. I love being a venture capitalist and enjoy the noble pursuit of helping great entrepreneurs build great businesses and I’m not going to sit around quietly when a guy like Ben takes his big platform and dumps on this profession and all the great people I know involved in it.

Ben, you end your post with some advice for your peers so I’ll do the same. Because of who you are and the platform you’ve got, you have the ability to influence many people. Entrepreneurs and VCs alike are listening to you. Lead by example and influence by your actions. You were a great CEO. Use the skills you developed there. I’m sure you didn’t call your employees out in public. If you see a VC (or an entrepreneur for that matter) behaving in an unproductive matter, talk to them one-on-one about it. I’m sure they’ll appreciate it and thank you. Oh, and here’s a last piece of wisdom I learned from my parents a long time ago. Don’t shit where you eat…

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Mark, I'm sorry but I must say that the Anon above is right, although he put it unnecessarily bluntly. I can surely understand that you're sick and tired, but if you're hearing it so much must mean that the Soviet team is really that good. You shouldn't take it too personally, especially as Brad wrote: "some VCs do things that I really don’t like" — some, not all.

Of course, blogs are a personal medium, and his views are personal as are yours. But don't make the standard mistake and try to disprove someone's views by emphasizing their "inexperience"; that's plain jealousy. And don't even think of tying to dispute me, since you know nothing about me (and no, LinkedIn will tell you nothing).

Great post Mark! I had the same, burning sense of disappointment after reading Ben's blog. I have the utmost respect for his accomplishments but am growing weary of these kinds of VC posts that paint the majority of the industry as arrogant and lazy. I love this job because most of the people I interact with, whether they're entrepreneurs or fellow investors, are passionate about innovation.

As VCs, we have the luxury of spreading our bets across multiple innovative ideas. We are certainly not the entrepreneur risking our life savings and spending every waking hour on a single company, but we are providing the capital and more importantly an experienced voice to help execute their vision. Some voices are more valuable than others, and we operate in a free market that eventually filters out many of the blowhards that Ben describes, which do exist but in smaller numbers that will get smaller in this economy.

Perhaps all the evil VCs are coffee drinkers. Maybe Ben needs to start having more tea.

Thanks for the supportive comments. Your observations about the free market weeding out the blowhards is spot on, couldn't agree more. The industry is more transparent than ever and that will only facilitate that process. Cheers, Mark

I have to admit, I agree with Ben's first and third points all the way. As an outsider to the VC industry, I can't comment there specifically, but the same points are true in corporate America. However, you do make a few good points as well. #2 sounds like a personality deal more than anything. I am not a fan of the passive aggressive part at the end of your post though.

Thanks for sharing these thoughts. My point was never to dispute that there are a few VCs who behave this way. Take his first point (which you agree with). I simply disagree with Ben that "A lot of VCs are fake casual" (his words, not mine). He's indicting an awful lot of good people with what I perceive to be a gross exaggeration.

You also subscribe to his his 3rd point. I agree with him (and you) that falling prey to pattern matching could be unproductive at best and damaging at worst when giving advice. I take issue however with the drama that he tries to get his point across. "Don't sell now, that's stupid?" I'm fairly certain I don't often hear VCs talk to CEOs that they work with like that. "Many VCs overreach with their pattern matching?" Perhaps a few, but I think Ben was being overly dramatic with many of his points.

I guess I left out part of my point. I don't know that I could agree that "A lot of VC's are X" because I don't know lots of VC's. My point is more that I think what he is saying is pretty equally attributable to many industries. Wherever there are people doing things, there are also some stupid people doing things. So in other words, I agree that his #1 and #3 points are very irritating, but like you said, they might be over done a tad.

I read this dude's blog. I don't know who he is and frankly I don't care to know him. I am not a product of this VC world, I don't have the big bucks that many do, and I don't know anything about technology — although I can appreciate its contribution. But as a former small business owner and a fairly involved community person, the one thing that I have come to learn is, no matter what, don't be an ass. It's bad for morale, it reflects poorly on you, and it doesn't do anything to advance the cause — whatever your definition of that may be. Good values are central to running businesses, moving communities and being a good person. I don't know the ROI on such an attribute, but I do know that crappy attitudes and personalities inclined to rip people down don't motivate people in the short term and don't do much good for a company's health and prosperity in the long term. Keep up the good work.

As I said in my post, by all accounts I've heard, Ben's a great guy and I'm not here to paint a negative picture of him. Blogging's a tough gig and sometimes we post without really thinking of the implications of what we're saying. I'm definitely giving him the benefit of the doubt and look forward to hopefully having a cup of coffee with him, maybe even without an agenda!

Anyway, thanks for the support and contributing to an important conversation!

Mark – I read this over the weekend and just wanted to say that I appreciate you taking the high road in your response to Ben’s blog post. It would have been easy to take a pot shot at him, but I like your approach of taking issue with his comments, not him the person.

Thanks pal, although I'd probably call it the upper-middle road. After re-reading it on PE Hub, I realize that I could have aimed a little higher. Great to see you in Denver for the RMVCA meeting and look forward to seeing you again one more time before we take off. Best, Mark

I've heard it said that over the long run you earn the VCs you have. If you end up in a situation where you hate your investors, you should probably think long and hard about what you can do to change the situation or to lay some positive groundwork for the next startup you have.

As an entrepreneur who's had some experience working at a venture shop, what Ben says rings true for some VCs, but I don't know if the proportion of challenging personalities is any higher in venture than and other highly competitive industry. The challenge of finding a good venture capitalist is the same as finding a great employee or partner – you have to work hard at finding the right fit for your personality/style/specific opportunity you're working on.

An entrepreneur has to adhere to the highest ethical standards and work hard every day to continue to earn the trust and respect from all the supporting cast of characters it takes to build and grow a successful startup. That cast includes your partners, employees, customers and the angel investors / venture capitalists who are trusting you with a great deal of money. If you think of every startup as a tryout for your next startup, you may end up cultivating a much better relationship with your VCs.

To anyone frustrated by an interaction with a VC, my advice is to take the highroad. Over the long run your success, hard work and ethical behavior will earn you the VCs you deserve.

"I've heard it said that over the long run you earn the VCs you have" & "If you think of every startup as a tryout for your next startup, you may end up cultivating a much better relationship with your VCs" are two of the most insightful observations I've heard in a long time. This is great advice entrepreneurs embarking on raising capital for the first time from someone who's walked in their shoes. Thanks for sharing…

[…] a quote from Mark Solon’s blog for which I’m in complete agreement (along with agreeing with his entire post, which was brave, honest and accurate) “The overwhelming majority of VCs I’ve worked with get up in the morning and think about how […]

Berislav, "If you're hearing it so muh must mean it's true?" C'mon, I know you're smarter than that. If that was the case then the State I live in is filled with Nazi hate crime advocates. I heard that all the time living back east but I've lived here for ten years and have seen nor heard of someone experiencing that.

If you read my post carefully, I disagreed with Ben's view not based upon his inexperience but on mine set of experiences. I've worked with hundreds of VCs from both coasts and from my experience, the behavior Ben describes has been exhibited by a small number of them.

Lastly, I'm not trying to dispute you, and I'm incredibly happy that you took the time to join this conversation. I feel lucky that this medium allows me to interact with people from all walks of life. All four of my grandparents were born in eastern Europe and I'm very enamored with that part of the world.

Thank you for the long reply. I don't have a problem with you disagreeing with Ben, nor I see his post as the absolute truth — as always, the devil is in the details. I was simply taking issues with the way you responded, both in your post and before in your emotional reaction. I've simply seen too many times this type of a reaction, when someone with a lot of experience finds a newcomer's comments (or success, sometimes) as inappropriate and "not right", and I felt that I should warn you not to go there, as i did to others.

And regarding Ben's post: so you agree that *some* VCs act like he described at *some* times ("a small number", as you put it). He might have perhaps state more clearly that his observations don't apply to everyone all the time, but still — we shouldn't stifle all criticism in order to protect "the right ones", since this will only encourage the wrongdoers.

As you know about this part of Europe, than you probably know about the political systems we've been through (and some still are); this might be the reason why I'm so sensitive about any apparent censorship I see.

In any case, I'll use this opportunity to invite you to come and see Croatia when you have an opportunity, with the upcoming summer the perfect time; we'll grab some great local food and talk about Croatian tech startups which are very interesting and with great potential, but unfortunately with a very brief lifespan due to a chronic lack of available seed funding…

Thanks for the gracious invitation Berislav. I've never been to Croatia and the next time I'm on your side of the Atlantic, it would be wonderful to take a side trip to take you up on it! Likewise, if you're ever in the western US, the invitation is reciprocal!